Herc Rentals’ integration of $5.3B H&E acquisition nearly complete

Herc Rentals anticipates the final integration of its $5.3 billion H&E Equipment Solutions acquisition over the weekend, further expanding the third-largest equipment rental company’s presence. 

“At the end of this weekend, we will be completely integrated. All 165 locations will be on the Herc platform as of this coming Monday morning, and operating as one company,” President and Chief Executive Larry Silber said during Morgan Stanley’s 13th Annual Laguna Conference on Sept. 11. “The H&E acquisition will give us the ability to grow without adding a lot more, really, brick and mortar [locations] and any more fixed cost capital.” 

Herc Rentals has made 53 acquisitions over the last four and a half years, Silber said. 

The acquisition of H&E, which was announced in June, also boosts Herc Rentals’ scale by more than 30%, including the expansion of its specialty fleet offerings, which represented 20% of Herc’s fleet versus just 3% at H&E at the time of the transaction, Herc Senior Vice President and Chief Financial Officer Mark Humphrey said during the conference. 

“Whether it’s the H&E historical customers or the Herc customers, on both sides, they were pleased with the transaction because it gives them more opportunities to use either H&E, if that was the preferred vendor, or Herc, with our new scale,” he said. “Now that we’re all going to be on one system as of Monday, the whole organization, we anticipate that to really accelerate.” 

Targeting specialty rental 

Herc Rentals views the specialty rental market as critical to its growth, with the company focused on expanding into additional specialty categories as well as customer development in the top 100 U.S. metropolitan areas to capture more market share, Silber said. 

“There’s a whole bunch of other specialty categories that are either in early stages or embryonic stages of moving, having that secular change that general rental has done over the last 10 years, that will move from ownership to rental,” he said. “It’s a significant opportunity to continue to grow there and continue to grow share as we grow the fleet around our specialty portfolio and build out those top 100 markets.” 

Meanwhile, it aims to meet customer demand for late-model, high-performing equipment, as well as expand its specialty offerings to include two new products, Humphrey said. 

“Some of the newest products that we’ve been introducing would be battery storage power as opposed to diesel power,” he said. “Another one we’ve been investing in quite a bit for the last couple of years and accelerating at the right time is load banks.” 

Data center load banks allow data centers to test power and cooling systems ahead of full-scale operations, with companies such as Mamaroneck, N.Y.-based Kwick Power Rentals already renting said equipment, according to the company’s website. 

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